Correlation Between Leyard Optoelectronic and New China
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By analyzing existing cross correlation between Leyard Optoelectronic and New China Life, you can compare the effects of market volatilities on Leyard Optoelectronic and New China and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Leyard Optoelectronic with a short position of New China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leyard Optoelectronic and New China.
Diversification Opportunities for Leyard Optoelectronic and New China
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Leyard and New is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Leyard Optoelectronic and New China Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New China Life and Leyard Optoelectronic is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Leyard Optoelectronic are associated (or correlated) with New China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New China Life has no effect on the direction of Leyard Optoelectronic i.e., Leyard Optoelectronic and New China go up and down completely randomly.
Pair Corralation between Leyard Optoelectronic and New China
Assuming the 90 days trading horizon Leyard Optoelectronic is expected to generate 1.12 times more return on investment than New China. However, Leyard Optoelectronic is 1.12 times more volatile than New China Life. It trades about 0.22 of its potential returns per unit of risk. New China Life is currently generating about 0.24 per unit of risk. If you would invest 398.00 in Leyard Optoelectronic on September 12, 2024 and sell it today you would earn a total of 242.00 from holding Leyard Optoelectronic or generate 60.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.28% |
| Values | Daily Returns |
Leyard Optoelectronic vs. New China Life
Performance |
| Timeline |
| Leyard Optoelectronic |
| New China Life |
Leyard Optoelectronic and New China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leyard Optoelectronic and New China
The main advantage of trading using opposite Leyard Optoelectronic and New China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leyard Optoelectronic position performs unexpectedly, New China can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in New China will offset losses from the drop in New China's long position.| Leyard Optoelectronic vs. Industrial and Commercial | Leyard Optoelectronic vs. Agricultural Bank of | Leyard Optoelectronic vs. China Construction Bank | Leyard Optoelectronic vs. Bank of China |
| New China vs. Jointo Energy Investment | New China vs. Tonghua Grape Wine | New China vs. Citic Guoan Wine | New China vs. Keda Clean Energy |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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